State readies bond money for school construction

(Calif.) The state Office of Administrative Law has approved regulations governing new accountability measures included in the 2017-18 budget on the use of bond money for school construction.

The rules, which came into force last week, require independent auditors review spending from the $9 billion school bond approved by voters last November.

Gov. Jerry Brown, who did not support the borrowing and has long-sought a restructuring of how school construction is funded, demanded as part of the budget negotiations that the auditing responsibility be shifted from the state to local, independent examiners.

Under the new rules, schools will be required to sign grant agreements prior to receiving state funding that specify allowable project expenditures.

As part of the budget agreement, the state plans on selling about $600 million of the bonds this fiscal year. That is expected to fully fund the state’s list of $368 million in projects already approved for funding as well as another $225 million in work considered to be next in line.

School facility managers have struggled since the recession to string together enough money for even small remodeling projects as state matching funds all but dried up in 2012, and the last statewide bond measure was approved in 2006.

Brown, famously conservative when it comes to taking on new state debt, conditioned release of the new bond money earlier this year with the adoption of new accountability measures on how districts use the funding.

Although the state’s role as a partner with local districts on school construction was established decades ago, Brown has been critical of the arrangement and has hinted in the past about trying to restructure the program.

Until now, the Office of School Construction was charged with making sure districts use bond money appropriately. But a 2016 review of those audits by the governor’s Department of Finance found a logjam of some $3 billion in spending that had not been analyzed.

In the meantime, the state pool of money supporting school facilities got close enough to empty that last spring, the State Allocation Board for the first time gave school boards authority to impose new fees on new housing developers. Those fees were largely put on hold after a coalition of school groups and home builders qualified the $9 billion bond for the November 2017 ballot.